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British government-Big Business revolving door

Former political staff turned lobbyists in the US claim their high salaries reflect their abilities, but critics complain they are merely exploiting political connections. Mirko Draca explains who’s winning the argument…

Often highly paid, these lobbyists claim their salaries simply reflect their high ability, but critics complain those exiting the revolving door are attractive to lobbying firms because they can exploit their political connections.

In this film Mirko Draca explains how he and his colleagues, Christian Fons-Rosen and Jordi Blanes i Vidal, measured the extent to which former political staff who become lobbyists benefit from their ties to government.

This involves separating the issue of ability from the issue of political connections. Fortunately, the political system contains conditions for testing this: periodic elections mean that political contacts are vulnerable. By looking at what happens to a lobbyist’s earnings when their former employer leaves political office, Draca and his colleagues have been able to measure the value of being politically well connected.

DAVID CAMERON predicted the scandal of George Osborne’s jobs back in 2010. A few months before becoming prime minister, Cameron gave a speech about “the next big scandal waiting to happen.”

Cameron said this forthcoming scandal was about “ex-ministers and ex-advisers for hire, helping big business find the right way to get its way.”

Cameron said this “corporate lobbying” was as bad as shameful MP’s expenses. Cameron called the jobs-for-the-boys scandal a feature of “crony capitalism,” part of “the far-too-cosy relationship between politics, government, business and money” that has “tainted our politics for too long.”

Osborne and a host of special advisers clearly read Cameron’s speech and took it as more of a recommendation than a warning.

Cameron said: “We must be the party that sorts all this out.” Cameron’s pals must have thought: “We must be the people that sort ourselves out.”

Osborne’s BlackRock and Evening Standard jobs show that he thinks the “relationship between politics, government, business and money” should be more than “cosy.” It should be incestuous. He heard Cameron say this “tainted” politics and probably thought: “Taint me baby, yeah.”

Osborne has a £650,000 a year job with Wall Street and City financial firm BlackRock, dwarfing his £75,000 MP’s salary.

Clearly the financiers will come ahead of his constituents. Money counts more than votes.

BlackRock, a huge investment company that was strengthened by the bank bailouts, which profits from our low tax, low regulation economy, was arguably rewarding Osborne for the way he backed the bailouts and neoliberal economics when chancellor. Of course, any future chancellor will regulate the City with an eye on that salary.

The BlackRock job was the bigger scandal but Osborne brought the issue to the fore with his new job editing the Evening Standard, owned by the Russian oligarch Evgeny Lebedev.

The supposed “checks and balances” of democracy have all collapsed in Osborne’s greed. Ex-chancellors become servants of financial firms. Newspapers are directly run by the ruling party. MPs are employed by oligarchs. The media is run by Wall Street’s servants. But Osborne is far from the only “ex-minister and ex-adviser for hire.”

Here are just a few examples: Sue Beeby was Osborne’s special adviser until July 2016.

Before that, she spent three years as Health Secretary Jeremy Hunt’s special adviser (or spad). In September 2016, she became an “associate director” of Lexington, a lobbying firm.

Lexington represents big banking and health interests. The giant vampire squid of banking Goldman Sachs is a client. Lexington also represents a host of big drug firms, including Pfizer.

This December, financial regulators fined Pfizer a record £84.2 million for an unjustified “drug price hike to the NHS.”

Lexington says it can help companies who are “seeking to input into policy or engage with government decision makers” or “navigate complex regulatory challenges.”

So having a former adviser to ministers on board is good for them. But it is, in Cameron’s words, “crony capitalism,” and so bad for us.

Thea Rogers was an Osborne spad before becoming his chief of staff until July 2016.

This January, she became chief spin doctor of Deliveroo — the food delivery company which pretends its lowpaid staff are “self employed.”

Complaints against unfairness by “gig economy” firms like Deliveroo are so strong that even Theresa May is promising to consider regulation. So now is a key time for Deliveroo to go full on crony capitalist.

The company has appointed a lobbying firm called Teneo to help it make its case.

Teneo is a US firm with a British outpost, which lobbies for Deliveroo and many other firms. The company says it can help its corporate clients to beat back “the threat of harsh regulation.”

Leaked emails from 2011 show Clinton’s daughter Chelsea visited Britain and found Teneo was trying to get political influence for its clients with British MPs in underhand ways that were causing her “serious concerns” and would “horrify” her father.

Cameron’s former “director of politics and communications” was a man called Craig Oliver. After Cameron bowed out of British politics following the EU referendum debacle, Oliver found himself a job with Teneo in its “government relations” department, a service that can “map and engage stakeholders at all levels of government.”

Nick Seddon was Cameron’s spad on health from 2013 to July 2016. In November 2016, Seddon became an executive vice-president of Optum, a division of US health giant UnitedHealth Group.

Seddon was seen as one of the most pro-privatisation members of the Cameron camp.

He argued the NHS should be replaced by an insurance system, with “healthcare largely funded by government” but “organised outside of government, by insurance companies and other organisations”.

Enormous private health companies are chasing huge NHS privatisation contracts. UnitedHealth Group is just the kind of firm who should not get NHS work because the company is repeatedly fined in its native US for misbehaviour.

Last July, UnitedHeallth Group/Optum paid an $18m fine in the US to settle charges they deliberately put non-terminal patients into their hospices, because the firm could make more money from US government health schemes by this nasty plan.

Elderly, but non-terminal patients with conditions like Alzheimer’s or dementia were put in hospices in order to harvest higher rates of government finance. This is one of a chain of fines for the firm. In 2014 California’s insurance commissioner fined UnitedHealth a massive $173m for “unfair business practices” relating to health insurance.

It should be kept as far away from the NHS as possible. But it has bagged a British insider to help their business.

Alex Morton was David Cameron’s housing spad. Last April, Morton joined Field Consulting. This lobbying firm represents luxury property developers that want to “influence a political decision.”

The company represents Berkeley Homes — the property developer which made its small number of social tenants enter its otherwise luxury Tower Bridge high rise through separate “poor doors.”

The list goes on and on. Osborne is at the top of a pyramid of paid-for politicians, of the capitalist cronies, of the ex-ministers and ex-advisers for hire. Below him are layer after layer of insiders taking the money.

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A SLEAZE watchdog will probe MPs taking on second jobs following former chancellor George Osborne’s controversial appointment as editor of the Evening Standard.

The Commons committee on standards announced yesterday that it would look again at its 2009 guidance that second jobs are acceptable as long as voters are informed about them at the time of the election.

It will consider the “reasonable limit” that could be applied to an MP’s outside interests.

Lord Bew of the committee told Radio 4’s Today programme: “The question for us — and it’s not just a function of the recent case — is has that compromise been working properly?

“Do we need to look again at what the reasonable limit might be for an MP’s outside interests?

“We will make a further submission on ‘reasonable limits’ for outside interests to the Commons committee on standards’s ongoing inquiry into the Code of Conduct for MPs.

“We will be holding a short review to inform our submission.”

The public are invited to make submissions to the review.

The chairman of the Committee on Standards in Public Life insisted that the review was not prompted purely by the Osborne case, insisting it had been under consideration for some time.

In 2010 David Cameron gave a speech in which he outlined “the next big scandal waiting to happen.”

Cameron said: “I’m talking about lobbying — and we all know how it works. The lunches, the hospitality, the quiet word in your ear, the ex-ministers and ex-advisers for hire, helping big business find the right way to get its way.”

Since then Cameron’s ex-ministers and ex-advisers have shown they took Cameron’s speech not as a warning, but as advice. They are queuing up to be “for hire” to “big business.” James Chapman is the latest in the queue.

For the last year Chapman has been a special adviser to Brexit Secretary David Davis. Before that he was director for communications for then-chancellor (now Evening Standard editor) George Osborne.

In July he became a “partner” in the “political practice” of lobbyists Bell Pottinger. The company has a long history of scandal.

In 2011, undercover reporters from the Bureau of Investigative Journalism spoke to the company, claiming to be representatives of the government of Uzbekistan trying to get a better image. The journalists picked Uzbekistan because of its terrible record on human rights and child labour.

Bell Pottinger was happy to take the meeting, and suggested it had an inside track to the Tory leadership. Its boss, Tim Collins, told the undercover reporters: “I’ve been working with people like Steve Hilton [Cameron’s close adviser], David Cameron, George Osborne for 20 years-plus. There is not a problem getting the messages through.”

His colleague suggested Bell Pottinger could “facilitate” a meeting between then-prime minister Cameron and then-Uzbek president Islam Karimov.

So Bell Pottinger seems to perfectly fit Cameron’s complaints of “money buying power, power fishing for money and a cosy club at the top making decisions in their own interest.”

The advisory committee on business appointments (ACOBA), the weak-jawed watchdog which is supposed to police the “revolving door” between business and politics, approved Chapman’s new job. It said he should not “lobby” the government for clients.

According to ACOBA: “Mr Chapman said that there could be very occasional, informal contact with special advisers or government ministers, such as if a client was invited to a stakeholder event organised by a government department.

“He made clear to the committee that any such contact would not involve lobbying government, but rather ‘straightforward exchanges of information’.”

ACOBA accepted Chapman’s argument — which shows that there is no real policing of lobbying.

Chapman is free to meet ministers and special advisers, because he has given his word he will be “straightforward” when working for Bell Pottinger.